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Analyst: Microsoft could buy Creative Technlogy in bid to compete with Apple iPod

Thursday, July 14, 2005 · 9:19 am · 19 Comments

“The share price of Creative Technology, whose MP3 music players compete with Apple Computer’s iPod, rose for a third day yesterday after Microsoft chairman Bill Gates reportedly said that his group would support Creative and other partners,’ Bloomberg reports. “Microsoft was ‘working hard’ to make it easier for Creative and other companies to use Microsoft software for its MP3 players, a Business Times report on July 9 quoted Gates as saying. ‘The iPod has done great marketing and great design,’ Gates was quoted as saying. ‘We have to do something with our partners that’s just better.’”

“Even with yesterday’s gains, Creative’s share price has tumbled 47% this year, compared with an 8,4% rise in the Straits Times index, making it the second-worst performer on the benchmark index,” Bloomberg reports. “Some analysts said the shares may be also gaining on speculation Microsoft might form ventures with Creative or take a stake in it… Analyst Don See of DBS Vickers said it was possible Microsoft could buy Creative.”

Full article here.

MacDailyNews Take: Steve Jobs just has to be laughing his ass off right now.

Related MacDailyNews articles:
Apple shares rocket in heavy early trading – July 14, 2005
Apple smashes street with record revenue, earnings; shipped 6.155 million iPods – July 13, 2005

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Comment Feed

19 Comments

me

Thursday, July 14, 2005 - 10:39 am · Reply

Wasn’t creative spending $100M on marketing to unseat the iPod? Where did that pipedream go?

If MS did by CREAF, it would be bad for iPod because MS could sell the units at a loss, just to gain market share, and be fine because of the huge cash and income stream. Apple could use some of the 7.5B in cash to do the same, but in a war of attrition, Apple won’t win against MS.

Still, as of yesterday’s numbers, Apple holds 82% of the dmp market, CREAF has 5% and the remaining 11% is fragmented among “the rest”.

my magic word is “over”
mrw0lf

Thursday, July 14, 2005 - 10:40 am · Reply

momentum… Apple has it.

Creative also has it, but going in the other direction.

How do you compete with a cultural phenomenon?
jojo

Thursday, July 14, 2005 - 10:40 am · Reply

whoa! creative and microsoft. what a pair of juggernauts! better watch out, apple. hehe… NOT!
wandering joe

Thursday, July 14, 2005 - 10:41 am · Reply

Gates has money to burn. Let him burn it.
drhufufur

Thursday, July 14, 2005 - 10:46 am · Reply

Would Billy Boy be prevented from weighing in due to monopoly concerns?
Chris

Thursday, July 14, 2005 - 11:00 am · Reply

yeah…if “competing” means to throw large sums of money into the fire.

MW: Sure…made me laugh
ndelc

Thursday, July 14, 2005 - 11:03 am · Reply

The truth is, Microsoft could probably buy Creative (or not) and manage to take over the top music spot. However, they’d do it by resorting to the underhanded business practices that got them where they are, not because they actually have a worthwhile product. Hollow victory if you ask me.
Trevor

Thursday, July 14, 2005 - 11:17 am · Reply

I wouldn’t want a Creative Junk Box if MS was giving them away. Bottom line: piece of junk!
John

Thursday, July 14, 2005 - 11:33 am · Reply

I don’t see how Microsoft could do any better by buying Creative since Microsofts own music download service isn’t doing any better than Creatives. They just don’t get it that people don’t want to rent there music and pay for it over and over every month to use it. iTunes has the market because it is the easiest to use and works on Mac and PC which no other service does period.

So this suggestion to buy Creative has no merit and is a dumb idea and would be a waste of money on Microsofts part.
Wilfred Hildonen

Thursday, July 14, 2005 - 11:35 am · Reply

In a dream I had last night, I saw something like this happening, only Billy Goates (the name one of the actors had in my dream) was looking for someone to team up with against the horrible onslaught by the MacTel, gobbling up market share like a wolverine after a hunger strike!

These are interesting times…
AlanAudio

Thursday, July 14, 2005 - 11:42 am · Reply

‘We have to do something with our partners that’s just better.’

Right Bill. You’ve identified the problem. We’re looking forward to seeing your ‘better’ product.

In recent months, it’s been obligatory for anybody from Microsoft to use the phrase “great marketing” whenever the iPod is discussed. The intention is to try and spread the impression that it only got where it did because of marketing. The simple truth is that the marketing only accelerated what was already happening and the most effective marketing of all is word of mouth.

Many people ( allegedly including Queen Elizabeth ) bought iPods after seeing others use them. That’s the sort of advertising that money can’t buy and it’s only possible if a product makes you go ‘Wow’ and then makes you lust after it, even if you previously thought you didn’t need it.

So all Bill needs to do is to produce something that works more reliably, is easier to use, is more fashionable, has more features and has more of a Wow factor.

Bill doesn’t seem to think it will be a problem.

Time will tell. They’ll be easy to spot. In a few years you’ll see them being sold off cheaply at the clearance stores. Look for the ones with the animated paperclip on the display.
Metryq

Thursday, July 14, 2005 - 11:45 am · Reply

“Steve Jobs just has to be laughing his ass off right now.”

Yeah, Steve won’t be sitting down for a while.
Jump

Thursday, July 14, 2005 - 12:15 pm · Reply

Isn’t that kind of like Ford buying Kia to get ahead of Porsche in sports car sales?
doPi

Thursday, July 14, 2005 - 12:18 pm · Reply

Oh Wilfred Hildonen

You poor soul.

Last night I dreamt that the girl I was sleeping with had a twin

Change pillows quickly Wilf, you are not getting your deserved rest.
NoPCZone

Thursday, July 14, 2005 - 2:07 pm · Reply

It figures.
The only way MS can get anything ‘creative’ is to buy it.
So true

Thursday, July 14, 2005 - 2:09 pm · Reply

“Isn’t that kind of like Ford buying Kia to get ahead of Porsche in sports car sales?”

<ROFLOL> Laughing so hard milk came out of my nose (and i wasn’t even drinking milk)!
Malthus

Thursday, July 14, 2005 - 2:23 pm · Reply

“Microsoft was ‘working hard’ to make it easier for Creative and other companies to use Microsoft software for its MP3 players”

Don’t they realize that is the problem? Creative et al need to distance themselves as much as possible from the crappy WMA and all that Plays-for-sh*t garbage.
Tommy Boy

Thursday, July 14, 2005 - 2:24 pm · Reply

drhufufur: In the MP3 player market Apple is the monopolist. There would be zero anti-trust concerns with M$ buying Creative.

So today Rush Limbaugh took personal responsibility for Apple’s results: “I heard from 1000s of listeners who told me they bought iPods just so they could listen to the Podcast of this show.”
Max King

Friday, July 15, 2005 - 11:26 am · Reply

They just don’t get it… they all think it’s the hardware and they’re all wrong (although Apple hardware kicks ass). It’s the iTunes software that makes the iPod so great. Another lame-oh MicroShaft piece of software running on an equally lame piece of CreativeLabs hardware junk is not going to unseat the iPod juggernaut.